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Home > Advocacy > Federal Budget > The President's FY 2009 Budget and Children


The President's FY 2009 Budget and Children


The President's proposed budget for fiscal year 2009 (FY 2009) will be the last for the Bush Administration and as a result be the budget the next president will work from in his/her initial first months. The overall priorities and goals outline by the President in this 2009 budget make this document almost a carbon copy of last years budget: cuts in human service programs include a half billion cut in the Social Service Block Grant (SBBG), reductions in health care, an SCHIP proposal that would result in a loss in coverage of children, extending the tax cuts of 2001 and no significant increase in priorities the Child Welfare League of America has advocated for. After a lengthy debate in 2007 the 110th Congress eventually agreed to President Bush's overall spending levels for discretionary spending but did not always adhere to his specific program requests. In the end child welfare programs dependent on discretionary (annually appropriated) funds absorbed a cut of around four percent.

The total budget for 2009 is $3 trillion and includes more than $1 trillion in discretionary funds. This includes spending for domestic programs as well as the Defense Department. It does not include funding for the war which is likely to be included in a separate appropriations bill. After discretionary spending, the remainder is made up of entitlements and mandatory spending. The largest of these entitlement and mandatory programs is Social Security ($694 billion,) Medicare ($407 billion) and Medicaid ($215 billion).

The President's budget once again requests an increase of five percent for the Defense Department with total funding requests set at $515 billion. This entire total comes from discretionary spending. The Defense request is separate from the additional $70 billion for the war in Iraq, an amount significantly lower than the amount of $200 billion in 2008 that the President is still seeking. Outside of the discretionary spending in Defense and homeland security the President is requesting less than a one percent increase for all other discretionary programs including all those we follow as well as areas such as agriculture, the environment, education and most federal departments.

Under the budget proposal, a balanced federal budget will be reached within four years although this budget indicates that the deficit will exceed $400 billion in FY 2008 and 2009 close to the high of $412 billion reached in 2004. The Administration also anticipates a renewal of all of the President's past tax cuts throughout the next five years.

The budget also calls for cuts of $200.1 billion in Medicare and Medicaid over five years. $17.4 billion of that total is estimated to come from legislative changes to Medicaid, plus $800 million saved from administrative changes to Medicaid. Previously issued and pending regulations that would negatively impact the child welfare and foster care communities include a proposed rule on Medicaid Rehabilitation Services, which is currently stopped by a moratorium in P.L. 110-173 until June 30, 2008. Also outstanding is a restrictive interim final rule on Medicaid Case Management and Targeted Case Management (TCM) Services.

The Administration once again calls for the optional child welfare block grant of Title IV-E foster care and adoption assistance funding and a half billion cut in the Social Services Block Grant (SSBG)-reducing that funding from $1.7 to $1.2 billion. This is the third consecutive budget in which the President has proposed a half billion cut to SSBG. CWLA will work for and for the third year in a row expects a bipartisan rejection of this proposal by the Congress.

This is the sixth straight budget the administration has proposed an optional conversion of Title IV-E funding into a fixed block grant despite the fact the proposal has never been specifically outlined in legislative detail. CWLA continues to reject the proposal as totally inadequate in providing the needed continuum of child welfare services from prevention, family support, aftercare and services to provide permanency through reunification, adoption and kinship care. This is truer today in light of the fact that funding was cut for a number of child welfare programs and the fact that eligibility for Title IV-E foster care and adoption assistance continues to be tied to an eligibility standard frozen as of July 16, 1996.

In addition, the Administration would eliminate funding for the Office of Juvenile Justice and Delinquency Prevention and all other dedicated funding for juvenile justice programs. These funds would be transferred, at a reduced amount, to a newly created block grant, The Child Safety and Juvenile Justice Program. Unlike the current system, where states are funded under a formula based on the number of youth who live there, states would be required to apply for grants, and face the uncertainty of continued funding and the possibility that funds would be denied entirely.

All of these proposals are opposed by CWLA.

The next steps for Congress are a series of hearings by the two Budget Committees and various committees of jurisdiction. The House of Representatives which generally acts first on appropriations issues will likely adopt their budget resolution before the Senate. This resolution will outline the limitations and areas of priority spending. The House leadership has indicated their desire to pass a House budget resolution by March 15. It is likely that many of the President's proposed budget actions will not be accepted under the new congressional leadership.

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Child Welfare

Title IV-E Foster Care
The Administration's budget projects that Title IV-E Foster Care spending will be $4.449 billion. This is an anticipated decrease of $132 million in Title IV-E claims from the FY 2008 level. It is likely these numbers will change over the next several months being adjusted up or down due to the fact that this is an entitlement and funding automatically increases as costs for eligible children increase (so both of these figures can increase or decrease accordingly).

Title IV-E Foster Care funds are used for maintenance payments and administrative costs. For FY 2009, the Administration projects approximately 203,000 children will be eligible for Title IV-E in an average month. This figure represents a decrease from last year's projection of 211,000. In addition to maintenance and administrative costs, states use these funds for training and for the operation and development of the Statewide Automated Child Welfare Information Systems (SACWIS), a computer-based data and information collection system.

Title IV-E Adoption Assistance Federal Title IV-E Adoption Assistance spending is projected to increase to $2.283 billion, an increase of $127 million over 2008 costs. Similar to foster care, these figures represent a projection. These funds will be used to provide maintenance payments to adoptive families, administrative payments for the costs associated with placing a child in an adoptive home, and training professionals and adoptive parents. The estimated level of funding will support approximately 430,000 children each month , an increase from the estimated 426,000 covered in the previous year. As stated previously, Title IV-E is an entitlement program and funding automatically increases as costs for eligible children go up.

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Social Services Block Grant (Title XX)

The President proposes to reduce funding for the Social Services Block Grant (SSBG) by $500 million. SSBG is a flexible source of funds that allows states to provide an array of services. Since 2000, funding for SSBG has been maintained at $1.7 billion. Last year, Congress rejected an identical proposal. The President proposes to reduce the SSBG total to $1.2 billion for FY 2009 and beyond. The Administration justifies this cut because this block grant offers "flexibility" but "it fails to ensure that funds are directed towards activities that achieve results."

SSBG represents 12% of all federal funding states receive from the federal government to provide child abuse prevention, adoption, foster care, child protection, independent and transitional living, and residential services for children and youth.

States can use SSBG to fund 29 different services to prevent or remedy neglect or abuse of children or adults, achieve or maintain economic self-support, reduce unnecessary institutionalization, achieve or maintain independence, and secure referral and screening for appropriate institutional care.

In FY 2005, the latest data available for SSBG, states spent over $755 million in SSBG funds on services to children and youth, including adoption, foster care, child protection, independent living, and residential services:
  • 30 states used $38 million in SSBG funds to assist in the adoption of children. In 2005, more than 181,000 children and families received support funded in part by SSBG.

  • 38 states used nearly $359 million in SSBG funds for foster care services to more than 518,000 children.

  • 41 states used more than $257 million in SSBG funds to protect children from abuse and neglect. More than 1.8 million children and adults received services funded in part by SSBG dollars. In 2005, state and local child protective service agencies received an estimated 3 million reports of child abuse and neglect.

  • 18 states used $8 million in SSBG funds to provide independent and transitional living services to more than 2,800 youths.

  • $93 million in SSBG funds supported residential treatment to more than 27,000 youth in 23 states.

  • 35 states used $145 million in SSBG funds to help more than 846,000 children, adults, and families for prevention and intervention services. Services and activities designed to provide early identification and to target services that might prevent incidents of abuse, neglect, or family violence, along with other harmful behaviors.
In addition to child welfare services, SSBG funds are used to provide child care, home delivered and congregate meals for senior citizens, family planning services, services to the disabled and domestic violence outside of child protective services; residential treatment services; substance abuse treatment, education and training, transportation services; information and referral and a range of home-based services.

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Child Welfare Financing

Child Welfare Program Option
The President's FY 2009 budget again proposes a child welfare financing option that would restructure the current Title IV-E Foster Care program. Under the proposal, each state would have an option to receive a fixed, predetermined allocation, or block grant, of Title IV-E Foster Care maintenance payments, administrative costs, and training funds rather then the current open-ended entitlement funding provided based on the number of eligible children.

This proposal was included in each of the President's Budget proposals for fiscal years 2004-2008, but no legislation has ever been offered by the President or congressional allies. The budget documents offer the same overview of the proposal as in past years.
  • States would receive fixed annual grants over a five-year period. Funding would equal the projected growth in federal foster care expenditures. These projections would be based on the current restrictions that require states to base eligibility on their 1996 AFDC program standards. States would be allowed to draw down up to 20% of this five-year total in any one year.

  • All states would have a set period of time to opt-in, or choose this option. States not choosing this option at that set time could not elect to make that choice at a later date. States that do choose this option must continue to receive this set funding for a period of five years have no opportunity to opt-out during the five-year period.

  • States choosing the option could spend the funds on foster care and any services now provided under Title IV-E and Title IV-B Child Welfare Services, and Promoting Safe and Stable Families programs.

  • States could use the funds for any child in the child welfare system, regardless of income. Based on current eligibility, approximately 50% of all children in foster care are supported with federal funds.

  • States would be expected to maintain the protections for children that exist in current law.

  • If a state experienced an unusual increase in their foster care population, a state could draw funds from an emergency fund under the Temporary Assistance for Needy Families (TANF) block grant. To qualify for this relief, a state would have to meet a national and state target increase in foster care caseload or unemployment rates.

  • A set-aside of $30 million would be established for Indian Tribes or consortia that demonstrate the capacity to operate a Title IV-E program. Indian tribes will have similar program requirements as states.

  • The Title IV-E Adoption Assistance program would remain unchanged. The eligibility for this program would continue to be linked to a state's 1996 AFDC standards.
Adoption Opportunities Program
The President's budget maintains funding for the Adoption Opportunities grants at $26 million, the same total approved for FY 2008. The program was reduced by half a million in FY 2008. The Adoption Opportunities Program provides several resources and supports to help with the adoption of children, including the Collaboration to AdoptUsKids, which recruits families for children waiting to be adopted through its National Recruitment Campaign. As of December 2007, 8,664 children had been listed on the website and placed in adoptive homes. Other elements of the AdoptUsKids Cooperative agreement include an annual summit, a national adoption workgroup, research on adoption, support for adoptive parent groups, the AdoptUsKids photo-listing site, and training and technical help for states as needed.

A major success has been the number of sibling groups families have adopted. Of the total number of children adopted from foster care through AdoptUsKids efforts, 2,440 children were from 992 sibling groups. The average sibling group size was 2.7 children and more than 100 of these sibling groups included groups of four or more siblings. Of all the children placed through AdoptUsKids, the average age of a child at placement was 10.1 years old, and the ages of the children placed spanned from 2 months to 20 years old.

Other examples of how the Adoption Opportunities Program funding has helped include:
      the National Resource Center on Special Needs Adoption, which provides technical help and training to state, tribal, and other child welfare organizations on current issues in special-needs adoption, such as compliance with federal laws and regulations, permanency planning, and cultural competence;

    • the Information Gateway, managed by Caliber, Inc., and the National Adoption Information Clearinghouse, which are comprehensive information centers on adoption;

    • the National Adoption and Foster Care Recruitment Campaign and the You Gotta Believe program, which seek permanent placements for older children; and

    • a focus on rural adoption, including 10 discretionary grants across the nation to explore and develop rural adoption, along with a focus on older youth permanency through nine discretionary grants to agencies involved in placement of older teens into permanent homes.
    Adoption Incentive Payments
    The budget proposes funding the Adoption Incentives program at $20 million-an increase from last year's final total of $4 million. All states have received an adoption incentive payment during at least one year out of the past eight. In 2006, 21 states qualified for $11.6 million, figures were not available for FY 2007 although the Administration indicates that 2,250 adoptions were rewarded in that year. Many states experienced their greatest increase in adoptions from 1997 to 1999, the initial years incentives were provided. Under the original formula, a state had to exceed the year it had its highest number of adoptions to continue to receive an incentive payment. As states successfully reduced the number of children in their child welfare systems, however, this became more and more difficult each year.

    Interstate Placement Incentive Fund
    The Administration includes no funds for a new incentive that states may receive if they can meet certain timelines in interstate (across state) placements of children for adoption or foster care. The incentive fund was created as part of the 2006 Safe and Timely Interstate Placement of Foster Children Act. If a state can place a child within 30 days of the request of another state an incentive payment of $1500.00 will provided. In its first year, FY 2008, funding was not provided.

    Independent Living
    The budget contains $140 million for the Chafee Independent Living Program. This total $140 million in mandatory funding is used by states for a variety of services to ease the transition from foster care for youth who will likely remain in foster care until they turn 18 and former foster children between the ages of 18 and 21, and is the same as the FY 2007 funding level. Approximately 24,211 young people left foster care as a result of age in FY 2005.

    Independent Living Education and Training Vouchers
    $45 million of the total funding for the Chafee Independent Living program is proposed for the Education and Training Voucher (ETV) program that was authorized in 2001 (P.L. 106-169). These funds unlike the $140 million, requires an annual appropriation. The program was funded for the first time in FY 2003 at $42 million. Funding was set at $45 million in FY 2008 a reduction of $800,000 from the previous year. The voucher program helps older youth leaving foster care obtain the higher education, vocational training, and other education supports needed to become self-sufficient. Full funding for this program is $60 million.

    Up to $5,000 per year is available to a young person for the cost of education or training. This program expands on states' efforts to provide these services. ETV funds are distributed to the states using the same formula as the Chafee Independent Living Program. If a state does not apply for funds for the ETV program, the funds will be reallocated to one or more states on the basis of their relative need for funds. While states are doing a good job generally of distributing these funds, older foster youth could take advantage of the vouchers if their availability was more widely known.

    Promoting Safe and Stable Families Program (Title IV-B, Subpart 2)
    The President's budget proposes funding the core Promoting Safe and Stable Families (PSSF, Title IV-B, Subpart 2) program at $368 million. This total represents $305 million in mandatory funds and $63 million in discretionary funds. In last year's FY 2008 budget PSSF received its single biggest cut in history. The core PSSF program can receive up to $505 million annually. The core or main PSSF funds are used for four services: family preservation, community-based family support services, time-limited reunification services and adoption promotion and support services.

    $20 million in mandatory funding is provided for the Court Improvement program. In 2006, Congress created two annual grants of $10 million each for court improvement efforts that attempt to improve the actions and involvement of local courts as they relate to a state's child welfare system.

    The budget also provides the third year of funding for competitive grants to address methamphetamine or other substance abuse as it affects the child welfare system. These funds are mandatory. In FY 2009 $30 million is provided. In FY 2008, $35 million was provided and these grants have not yet been awarded. The grants are $500,000 to $1 million each and are for 2 to 5 years. Grants can be used for family-based comprehensive long-term substance abuse treatment, early intervention and prevention efforts, child and family counseling, mental health services, parenting skills, and the replication of other successful long-term comprehensive substance abuse treatment initiatives.

    $10 million is provided in FY 2009compared to $5 million available in FY 2008. These funds are distributed to states by formula to carry out and address strategies to improve the child welfare workforce. Funds are mandatory and in addition to FY 2009 dollars, states can draw down their share of $40 million remaining in FY 2006 funds. Before funds are released, a state must implements policy and provide data that children in foster care are being visited on a monthly basis.

    Children of Incarcerated Parents
    The Administration requests $50 million for a program that provides mentoring for children with incarcerated parents. This program was authorized in the Promoting Safe and Stable Families Amendment Act of 2001 (P.L. 107-133) and funded for the first time at $50 million in FY 2005. Funding for FY 2008 was $49 million. It was reduced by $800,000.

    This is a competitive grant program providing grants up to $5 million each. The grant recipients are required to provide services, both directly and in collaboration with other local agencies, and to strengthen and support the families of those young people. This includes connecting the children with their imprisoned parent when appropriate.

    Child Welfare Services (Title IV-B, Subpart 1)
    Under the President's budget, the Child Welfare Services are funded at $282 million. This is the same as FY 2008. In FY 2008 this program was cut by $5 million.

    States use these funds to address problems that may result in neglect, abuse, exploitation, or delinquency of children; prevent the unnecessary separation of children from their families and restore children to their families, when possible or place children in adoptive families when appropriate; and assure adequate foster care when children cannot return home or be placed for adoption. There are no federal income eligibility requirements for the receipt of child welfare services.

    CAPTA Grants
    Child Abuse Prevention and Treatment Act (CAPTA) state grant funding is maintained at its FY 2008 level of funding of $27 million. Last year it was reduced by $500,000. CAPTA state grants are used to help improve state Child Protective Services (CPS) systems. CAPTA provides funding to address issues around child abuse and preventing child abuse. The state grants are provided to each state by formula and are used to fund a states Child Protective Services (CPS) system. The funding has been so limited over the years that states must supplement these dollars with other federal, state and local funds. None-the-less CAPTA does create a number of mandates on states tied to the funding the most prominent of which are requirements around mandatory reporting of child abuse and data collection.

    CAPTA discretionary grants remain at the same level as 2008 at $26 million with an additional $10 million increase designated for evidence-based home visitation programs. This $10 million support for home visitation was a proposal first offered by the Administration in last year's budget. The Congress modified it but agreed to include funding for FY 2008. The remaining CAPTA discretionary grants are non-formula funds used to promote research and program assistance and development.

    The FY 2009 Community Based Grants for Prevention of Child Abuse and Neglect would be maintained at the FY 2008 level of $42 million. This program was cut by 800,000 last year. These grants develop community-based and prevention-focused programs and activities designed to strengthen and support families to prevent child abuse and neglect. Funds are used at the local level for organizations such as family resource programs, family support programs, voluntary home visiting program, respite care programs, parenting education, mutual support programs, and other community programs or networks of such programs that provide activities designed to prevent or respond to child abuse and neglect.

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    Child Care

    The Administration proposes a continued freeze for child care funding as they predict that child care services will continue to decline. For FY 2009 the Administration proposes level funding at $2.06 million in annually appropriated funding. For seven years in a row, the Administration has offered a freeze in discretionary child care funds. The Administration projections show a loss of 200,000 child care slots in 2009 if there requested is approved. The Child Care and Development Fund (CCDF) is made up of both discretionary and mandatory child care dollars. The mandatory or guaranteed funding is now $2.9 billion. Funding was increased by $200 million as a result of the reauthorization of TANF included in the 2005 Deficit Reduction Reconciliation Act. This increase is currently available to states as federal matching funds. Approximately $1.8 billion flows to the states by a set formula, if a state adds state dollars as a match. The remaining funds are provided to states without a required match. As a result of the TANF reauthorization, child care mandatory funds will not increase through FY 2010, which makes the FY 2006 increase the last one that will occur for the remainder of this decade.

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    Head Start

    The President's budget proposes a slight increase in Head Start funding for FY 2009. The Administration request is that funding remains at $7.027 billion. Last year Head Start was reauthorized by Congress and received an increase of approximately $14 million $6.9 billion. Both last year's funding total and the Administration's request for FY 2009 leaves Head Start funding well below the proposed funding level included in the Head Start reauthorization which suggests $7.6 billion. Head Start is not experiencing the same rate of growth as before. Between FY 2002 and FY 2004, Head Start's national enrollment actually declined from a total of 912,345 to 905,851. This represented the first decline in enrollment from year to year since 1986-87 when enrollment declined by 5,000. Throughout the 1990s when significant investments were being made in program and staff quality and education, Head Start steadily increased rising from 540,930 children in 1990 to 857,664 by the end of the decade in 2000.

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    Temporary Assistance for Needy Families (TANF)

    The President's FY 2008 budget includes $16.5 billion in TANF funds to all 50 states, and approximately $319 million in supplemental grants to 17 states. As a result of the 2006 TANF reauthorization, this total now includes a $150 million fund for marriage initiatives and fatherhood programs. The Administration proposes that the work rate for two-parent families be changed to match the 50 percent work rates required for all families. Currently two-parent families have to meet a much higher work requirement with many states not able to meet the requirement. The Administration also indicates they will propose extending the current supplemental TANF grant for another two years. The supplemental grant of $319 million was extended for three years in last year's reauthorization instead of the five year reauthorization period of TANF. This grant supplements 17 states that experienced large growth or low funding in the first years of TANF.

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    Youth Development

    The President's budget includes a severe funding cut of $293 million for the 21st Century Community Learning Centers program. This program provides opportunities for students and their families to continue learning new skills and discover new abilities after the school day has ended. The program is funded through local school districts and attempts to fill some of the shortfalls in afterschool and child care services. The President's proposal would reduce funding from the 2007 total of $1.093 billion to $800 million.

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    Juvenile Justice

    The President's budget calls for eliminating dedicated funding for juvenile justice and delinquency prevention. This includes eliminating all funding for the Office of Juvenile Justice and Delinquency Prevention. In its place, a new flexible block grant will be created-the Child Safety and Juvenile Justice Program. The Child Safety and Juvenile Justice Program is proposed as a flexible grant program, whereby states and localities compete for funding based on local needs as well as national priorities. The new block grant will consolidate existing juvenile justice programs with other federal concerns including the Internet Crimes Against Children program. After overall funding cuts of over 40% the past six years, the Administration is now proposing to eliminate what remains of the federal commitment to a focused and dedicated system of federal funding, including the office that oversees, evaluates, and monitors juvenile justice throughout the country. The budget proposal eliminates all dedicated federal funding for juvenile justice, and places it, at a severely reduced amount, in a block grant program. Block grants are more susceptible to budget cuts because they are general, and are more likely to be labeled ineffective, since concrete outcomes are not monitored, or realized. In previous proposals, this administration trimmed the Juvenile Accountability Block Grants Program (JABG) from $250 million to $50 million, and has attempted to zero out all JABG funding. State activities focused on youth crime and delinquency prevention would be put at risk under such a block grant system. Unlike the current system, where states are funded under a formula based on the number of youth who live there, states would be required to apply for grants, and face the uncertainty of continued funding and the possibility that funds would be denied entirely.

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    Behavioral Health

    The President is proposing $3.158 billion in FY 2009 for the Substance Abuse and Mental Health Administration (SAMHSA), to improve the quality and availability of prevention, early intervention, treatment, and rehabilitation services in order to reduce illness, death, disability, and cost to society resulting from substance abuse and mental illness. This is a net decrease of $198 million from the 2008 Continuing Resolution. Substance Abuse Funding for the Substance Abuse Performance Partnership Block Grant is increased slightly from 1.679 billion for FY 2008 to 1.699 billion for FY 2009. The Substance Abuse Treatment Programs of Regional and National Significance are cut by $27 million for FY 2009. The Administration proposed a FY 2008 total of $352 million, while the President's FY 2009 request is $325 million. Funding for this program has been reduced over several years with funding at $418 million in 2005. In FY 2008, funding for these programs received a slight increase to just under $400 million. Abandoned Infants Assistance The President proposes to fund the Abandoned Infants Assistance Program at $12 million, the same amount it received in FY 2008. This program provides demonstration grants for services to infants and young children, many of whom are HIV-infected or drug-afflicted. These infants and young children are medically cleared for discharge from acute hospital settings, but remain hospitalized due to a lack of appropriate out-of-home placement alternatives. Mental Health The President's budget includes $784 million for mental health activities for FY 2009, a decrease of $23 million from FY 2008. Funding for the Mental Health Services Block Grant for states to provide community-based care for adults and children was requested at $428 million in FY 2008 and for FY 2009, is requested at $421 million. Funding for the Children's Mental Health Services Program is increased slightly from FY 2008. For FY 2008, the President requested $104 million and for FY 2009, $114 million. Under the President's budget, SAMHSA's Mental Health Programs of Regional and National Significance would be cut significantly by $144 million, decreasing funding from $299 million to $155 million. The Projects for Assistance in Transition from Homelessness (PATH), is increased from its FY 2008 level by a very slight amount-from $54 million to $60 million. These funds allow grantees to reach out to 154,000 homeless individuals, getting them off the streets and into mental health and substance abuse treatment services, as well as adequate housing.

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    Medicaid provides a vital health care safety net in every state. It is a lifeline to health care for children, people with disabilities and chronic illness, and low-income elderly people. To broaden coverage to low-income children, Congress enacted the State Children's Health Insurance Program (SCHIP) in 1997. SCHIP targets uninsured children under 19 with family incomes below 200% of poverty that are not eligible for Medicaid or are either not offered or cannot afford private insurance.

    The budget request projects Medicaid mandatory spending to be $215.66 billion for FY 2009, a nearly $7 billion increase over the funding level contained for FY 2008. Factored into the $215.66 figure, however, is $1.875 billion in federal savings due to proposed legislative changes to the Medicaid program. Over five years, these suggested legislative changes are anticipated to reduce federal Medicaid spending by $17.4 billion, while proposed administrative actions are expected to cut approximately $800 million.

    Again this year, among the proposed legislative changes to cut Medicaid is a proposal to cap Medicaid Targeted Case Management (TCM) reimbursement at a 50% federal matching rate, the same matching rate as Medicaid administrative services. Current practice allows TCM services to be matched at the higher Medicaid service rate that varies by state from 50% to as high as 80%. The Administration calculates this restriction will reduce Medicaid costs by $200 million in FY 2009 and a total of $1.1 billion over five years. For many states, these TCM funds represent a significant source of child welfare funding. This legislative proposal comes on top of a restrictive and seemingly overreaching interim final rule on Medicaid Case Management and Targeted Case Management (TCM) Services (CMS-2237-IFC), which was published in the Federal Register on December 4, 2007 and is speedily going into effect on March 3, 2008. This regulation largely eliminates child welfare and foster care's flexibility to provide case management and TCM services, in an effort to reduce federal Medicaid spending by $1.28 billion over five years.

    Also in limbo at this juncture is a proposed rule restricting the child welfare and foster care systems' ability to provide quality Rehabilitation Services to children with physical and/or mental disabilities in community-based settings. This regulation (CMS-2261-P) was published in the Federal Register on August 13, 2007, but has been temporarily stopped by inclusion of a moratorium in the Medicare, Medicaid, and SCHIP Extension Act of 2007 (P.L. 110-173). As such, no administrative action may be taken on the Rehabilitation Services rule until June 30, 2008.

    For both TCM Services and Rehabilitation Services, Medicaid funding is critical and must be preserved so that children's needs are met, particularly children and youth in foster care-who experience a disproportionate amount of physical and mental health issues. Title IV-E Foster Care and Adoption Assistance is available for the care and support of eligible children but this "care and support" only includes room, board, school supplies, supervision, and transportation. Title IV-E does not include treatment of a child's medical condition or the provision of social services. Medicaid services, on the other hand, do not pay for food, clothing, and shelter, but do help fund a recipient's medical condition, with "medical" encompassing both physical and mental health conditions.

    A reduction in the amount of federal support for the treatment of children would cause states to have to make a choice between continuing treatment at the same level at a greater cost in state/local dollars; decreasing the amount of treatment children receive; decreasing the number of children receiving treatment; decreasing the per diem reimbursement paid to the providers; or some combination of all of the above. The majority of providers already supplement their local/state/federal reimbursements that fall short of actual costs. A reduction in federal support for treatment would mean providers would have to choose between altering/reducing their programs; tapping deeper into their donor base (which raises the issue of whether a state is obligated to pay for the care of children in its custody); or both.

    SCHIP funding is projected to be at $8.2 billion in FY 2009, with the President proposing to increase SCHIP State allotments by $19.7 billion over five years. This exceeds the President's FY 2008 proposal, which came in at only a total increase of $5 billion over five years, but still falls drastically short of Congress's proposal to spend approximately $35 billion additional over five years. Congress's five-year reauthorization bills (H.R. 976 and H.R. 3963) sought to enroll close to four million additional low-income children in either SCHIP or Medicaid, most of whom are already eligible for the programs, but the President vetoed both measures. SCHIP was extended by the Medicare, Medicaid, and SCHIP Extension Act of 2007 (P.L. 110-173) through March 2009, with sufficient funding to avoid state shortfalls. Additionally, the President in his FY 2009 budget proposes $50 million in outreach grants to states for FY 2009, and $100 million in each of the following four years.

    Family Planning
    The Family Planning (Title X) program supports a network of more than 4,400 clinics nationwide serving approximately 5 million people. The FY 2009 budget request includes $300 million for the Title X family planning program, $17 million above the President's FY 2008 request and reflective of the final FY 2008 figure. Family Planning clinics provide access to a wide array of reproductive health and preventive services.

    Abstinence Education
    The FY 2009 budget proposes $191 million for abstinence only education, an increase of $28 million from FY 2008. This includes $137 million for community based abstinence education programs, $50 million for mandatory grants to states, and $4 million for evaluation funds.

    Maternal and Child Health
    Proposed funding for the Title V Maternal and Child Health Services Block Grant is decreased slightly from $693 million to $666 million. This program supports federal and state partnerships that provide critical services to 2.5 million women and 27.5 million children, including 1.4 million children with special health care needs. These services include public education and outreach, evaluations and quality assurance activities, support for newborn screenings and genetic services, and health care services including nutrition counseling. The budget request also proposes $100 million for the Healthy Start program, the same level approved for FY 2008. The Healthy Start program provides intensive services tailored to the needs of high risk pregnant women, infants, and mothers in diverse communities with high rates of infant mortality.

    The FY 2009 budget request includes $2.2 billion for the Ryan White HIV/AIDS program, the same figure requested last year. This is an increase of $95 million over FY 2006. The program provides comprehensive assistance to 500,000 individuals living with HIV/AIDS each year.

    Early Intervention for Children with Disabilities
    The President's budget proposes funding at $436 million for the Individuals with Disabilities Education Act (IDEA) Early Intervention Services Program (Part C) for FY 2009. Funding was increased in FY 2008 was $445 million. Through IDEA, the U.S. Department of Education works with states to ensure that children with disabilities receive an appropriate public education that includes preparing them for employment and independent living, and that all schools are held accountable for the educational results of children needing special education. This specific program provides grants to states to provide coordinated, comprehensive, multi-disciplinary interagency programs for early intervention services to children with disabilities, from birth until age-2 and their families.

    Health Research
    The President's FY 2009 budget request includes $29.5 billion for the National Institute of Health (NIH). NIH is the world's largest and most distinguished organization dedicated to maintaining and improving health through medical research and science. Of the 27 institutes and centers at NIH, those of particular importance to children and their families in the child welfare system include the National Institute of Child Health and Human Development. Funding for that Institute would receive $1.256 billion under the President's request and that would be just $1 million more than the 2008 level and a further reduction from 2007. The National Institute of Mental Health would receive $1.407 billion, a $2 million increase over 2008 but a likely cut from previous years. The National Institute on Drug Abuse would be funded at $1.002 billion, a $1 million increase from FY 2008 but a likely decrease from previous years; and the National Institute on Alcohol Abuse and Alcoholism would be funded at $437 million, a $1 million increase from FY 2008 but a likely cut from previous years. Child Welfare League of America
    Government Affairs Department
    Tim Briceland-Betts, Cristina Fahrenthold,
    Branden McLeod, John Sciamanna, Laura Weidner
    February 4, 2008

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